Legislators want greater control of state budget<\/p>\n
JAKARTA (JP): Members of the House of Representatives attacked
\nyesterday the proposed 1997\/1998 state budget, saying that
\nlegislators should have greater control of state spending and
\ndevelopment projects.<\/p>\n
Legislator Muchsin from the United Development Party (PPP)
\nfaction said that House budgetary rights should be "reviewed"
\nbecause they were not being exercised optimally.<\/p>\n
"There is an impression that the 'equal partnership' between
\nthe executive and the legislative bodies has not been fully
\nachieved," he told a House plenary session which was also
\nattended by Minister of Finance Mar'ie Muhammad.<\/p>\n
He said that this was apparent from the structure of the
\nproposed budget which gave the President -- through Presidential
\ndecrees (Keppres) -- the right to determine and plan which
\nsectors and sub-sectors were eligible for funds from the state
\nbudget and how much they would get.<\/p>\n
Furthermore, it also allowed the government to decide how to
\ntransfer the balance of budgeted project appropriations to other
\nprograms, he added.<\/p>\n
The state budget for the 1997\/1998 fiscal year balances at Rp
\n101.08 trillion (US$42.8 billion) which, when adjusted for
\ninflation, is only 5 percent larger than the current budget which
\nwill end in March.<\/p>\n
Muchsin said that legislators could not have full control of
\nthe state budget unless they knew the details of the projects
\nthat the government was planning to implement.<\/p>\n
He said another "peculiarity" in the proposed budget was its
\nhierarchy of regulations. The budget, he said, put government
\nregulations below presidential decrees.<\/p>\n
"This contradicts our country's law on hierarchy," he said.<\/p>\n
Similarly, House member Sri Kuntjoro of the Indonesian
\nDemocratic Party (PDI) said the government should include a
\ndetailed description of projects in the draft state budget now
\nbefore the House.<\/p>\n
"The legislature can only do its budget-controlling job if all
\nthe projects to be funded in the budget are specifically
\ndescribed in the budget plan.... This also helps to reduce
\nleaks," he said.<\/p>\n
Sri said the government's target to raise tax revenue by 11.6
\npercent in the draft state budget could be even more ambitious.<\/p>\n
"As our economy continues to grow so does our tax capacity,"
\nsaid Sri, the PDI spokesperson.<\/p>\n
Sri said the public's awareness of paying taxes determined the
\namount of revenue the state could get from them.<\/p>\n
"Judging from the ratio between our tax revenue and gross
\ndomestic product (outside oil), it seems the compliance of our
\ntaxpayers must still improve," he said.<\/p>\n
President Soeharto in his speech earlier this month said that
\nthe country's tax receipts for the current fiscal year were worth
\n11.8 percent of gross domestic product (GDP).<\/p>\n
These are expected to increase to 12.1 percent of GDP for the
\n1997\/1998 fiscal year.<\/p>\n
Soeharto said this was far below the taxation levels of
\nneighboring countries such as the Philippines with tax receipts
\nworth 16 percent of GDP and Malaysia with 33 percent.<\/p>\n
Soeharto said that if Indonesia's tax receipts were raised to
\n16 percent of GDP, like in the Philippines, the state would gain
\nRp 21 trillion more in revenue.<\/p>\n
"If we increase the ratio to the level of Malaysia, we could
\nearn about Rp 175 trillion, or more than 2.5 times the amount of
\nour current tax revenue," the President said.<\/p>\n
Soelaiman Biyahimo of PPP said taxation should be used by the
\ngovernment to control development and, if necessary, change the
\nincome and wealth structure of the private and public sectors.<\/p>\n
Soelaiman said that from 1992 to 1995, Indonesia's tax
\nreceipts to GDP continued to fall: from 13.2 percent in 1992, to
\n12.4 percent in 1993, to 12.7 percent in 1994 and to 11.6 percent
\nin 1995.<\/p>\n
He pointed out that the government's ability to collect taxes
\ndepended greatly on the quality of services, facilities, tax
\nregulations and the dedication and integrity of the government
\nofficials who dealt with taxpayers.<\/p>\n
"If the public -- especially taxpayers -- are unsure whether
\nthe taxes paid to the state will be used effectively and
\nefficiently... they will be reluctant to pay," he said.<\/p>\n
Soelaiman said the public often witnessed government officials
\n"siding with dishonesty and injustice".<\/p>\n
"This will have a very negative effect on the public's tax
\nawareness," he said.<\/p>\n
Sri also commented yesterday on the government's non-budgetary
\nspending which, when combined with the expenditure stipulated in
\nthe budget, could cause strong inflationary pressure.<\/p>\n
"Therefore, we welcome the bill on non-tax revenues which was
\nunveiled to the DPR (House) recently... This will greatly improve
\nthe government's budgetary discipline," he said.<\/p>\n
The bill, which is now being deliberated by the House, covers
\nall the government's income from taxes and other sources such as
\nlicensing, user fees, royalties, rents from state assets and
\ninvestment income from state assets.<\/p>\n
The PDI said the government should consider using the budget
\nsurplus from the oil and gas sector -- which was expected to
\nreach about Rp 3.5 trillion -- for "important things" such as
\nraising the salaries of civil servants and Armed Forces members.<\/p>\n
"This is particularly important for the lower-income
\ncategories (of the civil servants and Armed Forces members), for
\nwhom we propose a pay hike of at least 20 percent," he said.<\/p>\n
The draft budget includes a 16 percent increase in personnel
\nspending to Rp 21.19 trillion. (pwn)<\/p>",
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